DA requests Gigaba to probe CPS R1 billion profit

31 May 2017 - 08:28
By Tmg Digital
Malusi Gigaba. Pic: Martin Rhodes
Malusi Gigaba. Pic: Martin Rhodes

The DA has written to Finance Minister‚ Malusi Gigaba‚ requesting that he commence an investigation within the office of the Chief Procurement Officer into what it calls the “unconscionable” R1.1 billion profit that Cash Paymaster Solutions has made from the invalid social grants contract.

DA spokesperson on social development Bridget Masango said the DA believes that not only is such extraordinary profiteering from public money an insult to poor South Africans‚ it might also contradict the Constitutional Court order from 2014 which banned CPS from making any further profits from the invalid contract.

“On Tuesday CPS filed a statement of profit with the Constitutional Court‚ wherein it discloses a pre-tax profit of R1.1 billion from the Social Grant Distribution part of its work‚ but fails to disclose the profit it has made from other incidental services it has provided‚ including life cover‚ funeral insurance and pre-paid services.

“All in all CPS has been allowed to profit to the most extraordinary levels‚ directly from the safety net provided to the poorest and most vulnerable South Africans. It is a profit-driven company‚ but its contract was never valid and its work was only allowed to continue because of the sheer recklessness of Minister Bathabile Dlamini’s department and SASSA‚” Masango said.

Gigaba's advisor emerges as Gupta Home Affairs fixerDenel board member and advisor to minister Malusi Gigaba‚ Thamsanqa Msomi‚ has emerged as the fixer for Gupta family associates in the department of home affairs‚ documents show. 

Whether CPS had violated the Constitutional Court’s 2014 order preventing it from profiting would be up to the court to decide‚ she added.

“But we believe that the Chief Procurement Officer must investigate the terms under which this contract was concluded that allowed for such obscene profits to be made.

“Essentially‚ either CPS misled government at the time of contracting‚ or SASSA and the Department of Social Development agreed to this unacceptable profit margin.

“We expect that the Chief Procurement Officer will unearth the truth. If CPS misled government‚ every cent it has milked from South Africa must be recovered. Alternatively‚ if the Social Development Department and SASSA allowed for this daylight-robbery‚ albeit under an invalid contract‚ Minister Dlamini will have a R1 billion question to account to Parliament for‚” Masango asserted.